| U.S. Government Pension |
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Federal pension income. You may be able to subtract some or all of the pension income included in federal income. This includes benefits paid to the retiree or to the surviving spouse. The subtraction amount is based on the number of months of federal service before and after October 1, 1991. If all your months of federal service occurred before October 1, 1991, subtract your entire federal pension. If you have no months of service before October 1, 1991, you cannot subtract any federal pension. If your service was both before and after October 1, 1991, you will subtract a percentage of your pension income. Once you have determined the percentage, it will remain the same from year to year. Write it in the space provided on line 17.
Use the following formula to determine your subtraction amount:
Months of service
before 10/1/91
| x
| Federal pension
amount included
in federal income
| =
| Oregon
subtraction
| Total months
of service
|
Example: Rich worked for the U.S. Postal Service from August 5, 1965 until July 16, 1997. He worked a total of 370 months, of which 302 months were worked before October 1, 1991. Annually, he receives federal pension income of $35,000. Using the formula above, his allowable subtraction is computed as follows:
302
| | (81.6%) x $35,000 = $28,560
| 370
|
He can subtract 81.6 percent (302 ÷ 370), or $28,560 (81.6% x $35,000) of his federal pension. He will continue to subtract 81.6 percent of his federal pension income from Oregon income in future years.
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